. A firm is considering the following bank loan based on the following assumptions: $15,000,000 line of credit 4% stated rate on amount borrowed Average outstandings estimated at $10,000,000 (this includes the firm's budgeted cash shortfall and any required compensating balances) 10% compensating balance requirement on funds borrowed 80 bps (-80%) non-usage fee Interest and Fees (the numerator) are: Effective Cost Interest Expense + Commitment Fee Usable Funds Borrowed $680,000 $440,000 $640,000 $520,000